There is no respite for Surat’s textile manufacturers and retailers. First, a 5 per cent levy in goods and services tax (GST) and the subsequent rise in cotton prices after the Budget depleted their cash reserves. This had come even as the textiles industry was recovering very slowly from the demonetisation effects of 2016. But now, with the new e-way bill system on its way, businessmen of this Gujarat city apprehend that the situation might still worsen with newer problems surfacing in the days to come.
E-ways bill will have to be mandatorily produced by manufacturers and exporters transporting their goods that exceed a value of Rs 50,000 and traverse a distance of more than 10 km. Gujarat, along with Maharashtra and West Bengal, would implement the e-way bill system in a couple of months even though other states are to come within its ambit.
Surat-based Mahamantra Textile Mills proprietor Ashok Jain said, “Two years in a row, and we are still feeling the aftershocks of demonetisation, GST implementation and surge in cotton prices. If the e-way bill is forced upon us in the coming months, it would deal a heavy blow to the entire textiles business community—from trader to retailer to manufacturer.”
Cash crunch to worsen
Not a single day has passed without the industry trying to counter roadblocks caused by these problems. “We suffered huge losses, with our businesses cut nearly to half and very few buyers visiting us for our traditional home furnishing fabrics and accessories. Sales have dropped by 50 per cent, and most of our payments have been delayed by wholesalers,” Jain pointed out.
Some felt that the implementation of the e-way bill system would not be a boon for textiles businessmen, but instead dent in their earnings in the long-run. Jain said, “The Union government should act immediately and make a few amendments so that manufacturers and suppliers like us do not have to bear the brunt as far as levying e-bill charges for small consignments of stocks is concerned. Besides, steps need to be taken in transportation of goods locally to end-users.”
The concern of another Surat-based manufacturer Sanjay Khaitan, proprietor of Ajmera Fashion, was similar. Ajmera Fashion has established itself in the manufacturing of partywear and pochampally, ikkat sarees along with designer lehengas, kurtis and cholis since inception in 2012. “We are now faced with recession of a different kind, and it has hit every manufacturer, wholesaler and retailer associated with the textiles industry. Our sales numbers have dropped in comparison to previous years, with only a minimal daily supply of 2000-3000 saree pieces now. The impact will be severe if the Gujarat government implements the e-way bill system in the near future.”
Given the backdrop of demonetisation, GST hike and cotton prices—all of which had been a dampener on the business, Khaitan said, “If this trend continues, imagine the outcome it would have on average manufacturers who have been left in the lurch. Hardly any money would be left in their hands so as to transport large consignments of goods to different states across the country.”
Bhupendra Singh, senior official of Ganpati Textiles, said, “The e-way bill system will escalate matters. Huge consignments of stocks are transported to different states and there would hardly be any relief for those engaged in manufacturing of sarees, kurtis, lehenga, leggings, etc. Is it just us who have to foot the bill? The government has to protect interests of the textiles industry.” (CV)
Fibre2Fashion News Desk – India
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